Thoughts on recent Ninth Circuit and California appellate cases from Professor Shaun Martin at the University of San Diego School of Law.

Thursday, March 02, 2006

Gober v. Ralphs Grocery (Cal. Ct. App. - March 1, 2006)

The saga of Gober v. Ralphs Grocery continues. But at least there's now light at the end of the tunnel. Though, at least to a degree, for Ralphs, that light is merely yet another train, about to run them over in yet another potential multimillion dollar award.

I'm particularly tied to this case in two ways. First, I once (long ago) represented a witness in the lawsuit, who was subpoenaed by the plaintiffs but which I successfully quashed. Second, my wife and I used to shop at one of the relevant stores; in particular, the Sports Arena Ralphs here in San Diego.

I won't bore you with the entire saga, which I recounted (in part) back in April 2005. You can read that post here if you'd like. Essentially, this is a story of a very, very bad boy, Roger Misiolek, who harassed a variety of women; a set of big, hulking punitive damages awards against Ralphs; some really poor strategic decisions by Ralphs' counsel (and some outright bad lawyering), and then an even bigger award against Ralphs on retrial. We're talking about Ralphs losing many, many millions of dollars as a result.

Well, Ralphs does a tiny bit better in this latest appellate round. Though they're still out millions. But at least they're not out tens of millions. In the end, Justice McIntyre says: I'm sick and tired of all these retrials on the punitive damages phase. Let's just give the plaintiffs the maximum constitutionally permissible amount. Which turns out to be, in his view, six times the various compensatory damage awards.

So, for example, Finton, who was awarded $62,500 in compensatories in the first trial, and $350,000 in punitives -- at which point Ralphs demands (and receives) a new trial on the punitives phase, only to see the second jury award Finton $5,000,000 instead (subsequently reduced to $937,500 by the trial court) -- in the end has to pay Finton $375,000 in punitives. So $25,000 more that if Ralphs had just paid the punitives awarded in the first trial. Plus, don't forget, that Finton is entitled to his attorney's fees for all these rounds of trials and appellate proceedings. Which Ralphs is going to have to pay as well. Ouch.

The rest of the Finton plaintiffs end up basically the same way. (2) Lang's innitial award is $62,500 in compensatories and $325,000 in punitives, and after all this work, Ralphs has to pay $50,000 more in puntitives. (3) Noland gets $150,000 in punitives, but ends up getting double that; i.e., $300,000. (4) Paprio is initially awarded $500,00 in punitives, but, thankfully, this is the only one in which Ralphs makes some headway; Papiro eventually ends up only with $450,000. But, trust me, the extra fees that Ralphs is going to have to pay to counsel for Papiro -- not to mention the amount paid to Ralphs' own lawyers -- is going to utterly swamp this $50,000 in "savings".

There are, by the way, two other plaintiffs: Gober and Swann. They accepted the court's initial remittitur, and Ralphs elected not to appeal their awards. But if they had, Gober would have ended up with $100,000 less in punitives ($1.2 million vs. $1.3 million) and ditto for Swann ($600,000 vs. $700,000). Plus, because Ralphs did not appeal, these two end up getting additional postjudgment interest as well.

Look, in the end, the appellate attorneys for Ralphs at least prevent some of the harm that the initial bad, bad decisions created. A 6-1 punitive damages ratio is actually -- in my mind -- a really, really, really good result for Ralphs, and is both probably better than Ralphs expected as well as, potentially, too lax as a matter of law. But I guess that's an issue for the next appellate tribunal, in the (unlikely) event that the California Supreme Court wants to keep this thing going.

What a clusterfart. At least it's just about over. But wait 'til you see the fee application that plaintiffs' counsel will file. Oh, boy. It ain't gonna be small. At all.